Deck 12: Engaging Customers and Communicating Customer Value Advertising and Public Relations

Question 1

On the eve of the biggest e-commerce shopping day of the year in 2013, Amazon's normally secretive founder and CEO, Jeff Bezos, scored a public relations home run by going on CBS's 60 Minutes program to unveil the company's Prime Air un-manned aircraft project to deliver packages to consumers' door-steps. Forget that it couldn't be implemented because the Federal Aviation Administration does not allow such use of drones and that it will likely be 2026 before drone delivery might even be possible. The interview set off "Dronerama," as some have called it. The next morning-Cyber Monday-the media were abuzz about drone delivery, with news organizations and Internet sites replaying the video of Amazon's cool drone delivering a package. The normally hard-hitting 60 Minutes interview has been criticized because the interviewer, the famous Charlie Rose, seemed to gush all over Bezos and ignore other controversial issues, such as working conditions at Amazon. Rose further gushed over Amazon during the 60 Minutes Overtime digital supplement to the show. Critics believe the normally unattainable Bezos called the shots in return for appearing on the show. "Dronerama" not only got Amazon on every cyber shoppers' lips on that all-important online shopping day, it seemed to take some of the wind out of the sails of a recently released book critical of Bezos at a time when Amazon needed customers the most.
Watch the 60 Minutes interview at www.cbsnews.corn/ news/amazons-jeff-bezos-looks-to-the-future/. Is it ethical for companies to use the media in this way to gain favorable exposure? Did Jeff Bezos acknowledge the fact that drones were not feasible at the time of the inter-view? (AACSB: Communication; Ethical Reasoning; Reflective Thinking)

Answer 1

Person JB, CEO of company A was interviewed by CBS in order to reveal the airline packages that are being offered to consumers. However the same could not be implemented as the aviation academy did not give permission to use drones and thus, this interview was criticized as the major controversial issues were ignored.
No, the way person JB tried to capture the attention of the media by using a drone to deliver a package is not ethical because, federal regulations do not allow drones to be used for purposes other defense and military intelligence operations.
The manner in which he tried to capture the attention of the media may appear novel but it is not ethical in nature. However, during the show and the subsequent press conference person JB had agreed to the fact use of drones at this time is not a feasible one for commercial operations.

Question 2

On the eve of the biggest e-commerce shopping day of the year in 2013, Amazon's normally secretive founder and CEO, Jeff Bezos, scored a public relations home run by going on CBS's 60 Minutes program to unveil the company's Prime Air un-manned aircraft project to deliver packages to consumers' door-steps. Forget that it couldn't be implemented because the Federal Aviation Administration does not allow such use of drones and that it will likely be 2026 before drone delivery might even be possible. The interview set off "Dronerama," as some have called it. The next morning-Cyber Monday-the media were abuzz about drone delivery, with news organizations and Internet sites replaying the video of Amazon's cool drone delivering a package. The normally hard-hitting 60 Minutes interview has been criticized because the interviewer, the famous Charlie Rose, seemed to gush all over Bezos and ignore other controversial issues, such as working conditions at Amazon. Rose further gushed over Amazon during the 60 Minutes Overtime digital supplement to the show. Critics believe the normally unattainable Bezos called the shots in return for appearing on the show. "Dronerama" not only got Amazon on every cyber shoppers' lips on that all-important online shopping day, it seemed to take some of the wind out of the sails of a recently released book critical of Bezos at a time when Amazon needed customers the most.
Create a presentation on the publicity Amazon received as a result of the 60 Minutes interview and continues to receive over drone delivery. Would you judge this campaign a success or failure? (AACSB: Communication; Use of IT; Reflective Thinking)

Answer 2

C:\Users\Images\1.jogC:\Users \Images\2.jog C:\Users\Images\3.jogC:\Users \Images\4.jogThis campaign is considered a success for the company. It boosted the buyer accounts with the company. Additionally, it created the buzz in the market and the media. The company A was considered as innovative among its competitors because of coming out with such a novel concept.

Question 3

Using the percent-of-sales method, an advertiser sets its advertising budget at a certain percentage of current or forecasted sales. However, determining what percentage to use is not always clear. Many marketers look at industry averages and competitor spending for comparisons. Web sites and trade publications publish data regarding industry averages to guide marketers in setting the percentage to use. For example, firms competing in the toy and apparel industries spend 10 percent or more of sales on advertising, whereas firms competing in the mortgage servicing and insulation industries spend less than 1 percent of sales on advertising. You read about GEICO at the beginning of the chapter. It is the number-two auto in-surer with $17 billion in revenue last year. It spent $1.1 billion on advertising that year and plans to continue spending the same percentage of sales on advertising next year. The aver-age advertising-to-sales ratio for the insurance industry is 0.1 percent of sales.
If GEICO projects $19 billion in sales next year, using the percentage-of-sales method of advertising budgeting, how much will the company budget for advertising if basing it on projected sales? (AACSB: Communication; Analytical Reasoning; Reflective Thinking)

Answer 3

Percentage of sales method is one method of establishing an advertisement budget. Percentage of sales method is used to fix budget at a certain percentage of forecasted sales or current sales. This can be derived using the total amount of sales or price per unit of sales. It assists management to regulate the relationship between selling price, promotion spending and profit per unit.
Generally, how much amount should be spent on advertisement is not clear. A Company may spend an amount on the some basis of sales. Different websites, business newspaper generally can be a guide to business. In case of the company G, it expected turnover of $19 million in the next year. Generally company can spend 10% or more of sales after advertisement.
Hence, in the present case, G can spend
or more for advertisement expenses. It is based on a percentage of expected sales.

Question 4

Using the percent-of-sales method, an advertiser sets its advertising budget at a certain percentage of current or forecasted sales. However, determining what percentage to use is not always clear. Many marketers look at industry averages and competitor spending for comparisons. Web sites and trade publications publish data regarding industry averages to guide marketers in setting the percentage to use. For example, firms competing in the toy and apparel industries spend 10 percent or more of sales on advertising, whereas firms competing in the mortgage servicing and insulation industries spend less than 1 percent of sales on advertising. You read about GEICO at the beginning of the chapter. It is the number-two auto in-surer with $17 billion in revenue last year. It spent $1.1 billion on advertising that year and plans to continue spending the same percentage of sales on advertising next year. The aver-age advertising-to-sales ratio for the insurance industry is 0.1 percent of sales.
How much would GEICO budget if the company based its advertising spending on the industry advertising-to-sales ratio? Is GEICO consistent with average industry ad spending? (AACSB: Communication; Analytical Reasoning; Reflective Thinking)

Question 5

On the heels of its wildly popular "Ship My Pants" ads, Kmart struck again with an ad that was considered hilarious by some, offensive by others, and a stroke of genius by advertising critics. Its latest ad, "Big Gas Savings," was launched on YouTube prior to airing on television. And like its "Ship My Pants" predecessor, the ad also went viral.
In addition to relying on potty humor to pull its sales out of the toilet, Kmart struck a very timely note in the tune of customer value-saving money on gasoline. Customers could save 30 cents a gallon on gas by spending $50•or more in its stores.
Millions of customers took advantage of the offer, driving traffic into Kmart stores.
After viewing the video featuring Kmart, answer the following questions:
What is the advertising message in the Kmart "Big Gas Savings" ad?

Question 6

On the heels of its wildly popular "Ship My Pants" ads, Kmart struck again with an ad that was considered hilarious by some, offensive by others, and a stroke of genius by advertising critics. Its latest ad, "Big Gas Savings," was launched on YouTube prior to airing on television. And like its "Ship My Pants" predecessor, the ad also went viral.
In addition to relying on potty humor to pull its sales out of the toilet, Kmart struck a very timely note in the tune of customer value-saving money on gasoline. Customers could save 30 cents a gallon on gas by spending $50•or more in its stores.
Millions of customers took advantage of the offer, driving traffic into Kmart stores.
After viewing the video featuring Kmart, answer the following questions:
Why did Kmart choose to air this video on YouTube?

Question 7

Name and describe the five major promotion tools used in marketing. (AASCB: Communication)

Question 8

On the heels of its wildly popular "Ship My Pants" ads, Kmart struck again with an ad that was considered hilarious by some, offensive by others, and a stroke of genius by advertising critics. Its latest ad, "Big Gas Savings," was launched on YouTube prior to airing on television. And like its "Ship My Pants" predecessor, the ad also went viral.
In addition to relying on potty humor to pull its sales out of the toilet, Kmart struck a very timely note in the tune of customer value-saving money on gasoline. Customers could save 30 cents a gallon on gas by spending $50•or more in its stores.
Millions of customers took advantage of the offer, driving traffic into Kmart stores.
After viewing the video featuring Kmart, answer the following questions:
Is this Kmart ad effective? Explain.

Question 9

What is integrated marketing communications (IMC), and how does a company go about implementing it? (AACSB: Written and Oral Communication)

Question 10

If assigned by your instructor, complete these writing sections from your Assignments in the MyLab.
Name and describe the various execution styles for presenting messages and provide an example of each style different from the ones in the chapter. (AACSB: Communication)

Question 11

Compare and contrast push and pull promotion strategies and discuss the factors marketers consider when deciding which one to use. (AACSB: Communication; Reflective Thinking)

Question 12

Discuss the major advertising objectives and describe an advertisement that is attempting to achieve each objective. (AACSB: Written and Oral Communication; Reflective Thinking)

Question 13

What are the role and functions of public relations within an organization? (AACSB: Written and Oral Communication)

Question 14

Discuss the major public relations tools and the role played by the Internet and social media. (AACSB: Written and Oral Communication)

Question 15

Marketers use Q Scores to determine a celebrity's appeal to their target audience. Research Q Scores and write a report on a specific celebrity's Q Score for the past several years. If the score changed considerably, what could be the reason? What other types of Q Scores are there besides scores for celebrities? (AACSB: Communication; Reflective Thinking)

Question 16

Find three examples, of advertisements that incorporate socially responsible marketing in their messages. Some companies are criticized for exploiting social issues or organizations by promoting them for their own gain. Do the examples you found do that? Explain. (AACSB: Communication; Ethical Reasoning; Reflective Thinking)

Question 17

The Public Relations Society of America (PRSA) awards the best public relations campaigns with Silver Anvil Awards. Visit www.prsa.org/Awards/Search and review several case reports of previous winners. What does the field of public relations encompass? Write a report on one of the award winners focusing on marketing-related activities. (AACSB: Written and Oral Communication; Information Technology; Reflective Thinking)

Question 18

Marketers have always advertised in traditional media such as newspapers, television, and magazines, but today they are increasingly creating content for the online platforms of these media through native advertising, also called sponsored content. This form of promotion is not new. It dates back to the late 1880s as "reading notices" that placed information about brands and companies in news stories, usually without indicating sponsorship. However, sponsorship of today's native advertising is often clearly labeled. Native advertising is growing quickly. It is now offered by 73 percent of online publishers, and more than 40 percent of brands now use it. For example, Forbes's BrandVoice lets companies such as IBM and CenturyLink place content both in the print magazine and on its digital platform at Forbes.com. Readers can learn from CenturyLink about how big data will change travel marketing or from Samsung about how to close the gender gap in science, technology, engineering, and math (STEM) education. Other publisher sites, such as The Huffington Post, help marketers create sponsored content. Its HuffPost Partner Studio provides writers, designers, and editors who assist business partners in creating relevant content about their brands in the familiar HuffPost voice. Fiber One tells readers "11 Diet 'Rules' You Can Absolutely Break," IBM explains how businesses can use social media, and Cottonelle tells readers how to fix the mistakes they are making in the bathroom. Social media are also getting in on the action. For example, Facebook reaped more than $1 billion in mobile native advertising alone in just one quarter. The rapid growth of native advertising has also caught the attention of the Federal Trade Commission. The FTC recently held a conference, "Blurred Lines: Advertising or Content? An FTC Workshop on Native Advertising" to discuss the issues of blending advertising with news and other content, leaving some to wonder if further regulations are forthcoming.
Find examples of native advertising on various publishers' Web and mobile sites. Create a presentation with screenshots showing the content and how it is identified. Has the content been shared with others via social media? (AACSB: Communication; Use of IT)

Question 19

Marketers have always advertised in traditional media such as newspapers, television, and magazines, but today they are increasingly creating content for the online platforms of these media through native advertising, also called sponsored content. This form of promotion is not new. It dates back to the late 1880s as "reading notices" that placed information about brands and companies in news stories, usually without indicating sponsorship. However, sponsorship of today's native advertising is often clearly labeled. Native advertising is growing quickly. It is now offered by 73 percent of online publishers, and more than 40 percent of brands now use it. For example, Forbes's BrandVoice lets companies such as IBM and CenturyLink place content both in the print magazine and on its digital platform at Forbes.com. Readers can learn from CenturyLink about how big data will change travel marketing or from Samsung about how to close the gender gap in science, technology, engineering, and math (STEM) education. Other publisher sites, such as The Huffington Post, help marketers create sponsored content. Its HuffPost Partner Studio provides writers, designers, and editors who assist business partners in creating relevant content about their brands in the familiar HuffPost voice. Fiber One tells readers "11 Diet 'Rules' You Can Absolutely Break," IBM explains how businesses can use social media, and Cottonelle tells readers how to fix the mistakes they are making in the bathroom. Social media are also getting in on the action. For example, Facebook reaped more than $1 billion in mobile native advertising alone in just one quarter. The rapid growth of native advertising has also caught the attention of the Federal Trade Commission. The FTC recently held a conference, "Blurred Lines: Advertising or Content? An FTC Workshop on Native Advertising" to discuss the issues of blending advertising with news and other content, leaving some to wonder if further regulations are forthcoming.
Debate whether the FTC's current regulations and guidelines regarding online advertising are adequate for this nature of advertising promotions. Will the FTC likely issue new guidelines or regulations? (AACSB Communication; Reflective Thinking)